Republican lawmakers warned Monday the sale of a clean-energy firm to a Chinese company could hurt national security.

Wanxiang America is purchasing A123 Systems’s automotive, energy storage and commercial and government operations in a $256.6 million deal.

{mosads}While Wanxiang is not buying A123’s government business — which includes all military projects — GOP lawmakers said they opposed the deal because it could still hamper national security by giving the Chinese government access to U.S. secrets.

“A123’s core battery technology is used in all of their business applications and allowing the sale of one facet of the company may very well grant the buyer complete access to critical technology and intellectual property that cannot be separated among business lines,” Rep. Marsha Blackburn (R-Tenn.) said in a Monday statement.

She said it could be “technically impossible” to divorce the Waltham, Mass.-based battery firm’s commercial and government intellectual property.

Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) said the Committee on Foreign Investment in the United States should block the transaction. CFIUS is a Treasury Department-led interagency panel that vets — and has the power to block — foreign acquisitions with national security implications.

“The review process at the Treasury Department is the last hope for ensuring some regard for U.S. interests. I look forward to a decision,” Grassley said in a Monday statement.

Wanxiang America, which is privately owned and based in Chicago, agreed on Sunday to the deal. In a separate deal, the A123 government business was sold to Woodridge, Ill.-based Navitas Systems for $2.25 million.

A123 was the recipient of stimulus funds, something that has also provoked GOP ire.

A123 collected on about $132 million of a $249 million Energy Department (DOE) grant before filing for bankruptcy in October. That grant helped pay for a battery factory in Livonia, Mich., which was sold to Wanxiang on Sunday.

“In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns,” Thune said in a Monday statement.

A spokesman for the Energy Department said the stimulus funds would remain in Michigan.

“The Energy Department worked through the bankruptcy process to ensure
that the plants and equipment that were partially paid for by the
Recovery Act would remain in Michigan, generating jobs and opportunity
for American workers,” spokesman Bill Gibbons said in a statement. 

“We are pleased that all the bidders indicated
they would keep those Michigan facilities operating, consistent with
the intent of the grant. The winning bid was roughly twice the amount
that had been paid on the grant, which is a clear indication about the
value of this growing industry.”

—Ben Geman contributed to this story.